Tesco checks out phone services

The supermarket giant will attempt to sell its customers telecommunications along with their groceries

Customers can now get more than their weekly shop with Tesco -- the supermarket has announced telecommunications will join the growing list of services it offers.

With retail margins squeezed ever tighter, all the major chains are looking for ways to get their customers to spend more money with them.

Tesco was the first supermarket brand to make a success of online groceries and personal finance schemes, and is now entering the telecoms market to compete with BT.

BT customers must keep their BT line and continue to pay rental, but Tesco claims they will still end up saving money through lower-cost calls.

Andy Dewhurst, chief executive of Tesco Telecom, told silicon.com: "BT doesn't offer customers a very good deal. With Tesco Talk 1 for light users, customers can save about 30 per cent over BT -- around £40 per year. They are quite significant savings."

And far from making a tentative foray into the beleaguered telecoms market, Dewhurst said Tesco will launch its own mobile-operator brand in time for the Christmas market this year.

Tesco is using Cable & Wireless' carrier pre-selection technology for the service, which allows consumers to select a new phone supplier without needing to dial PIN codes or install a special box at home.